How to Sell your Small Business

Owning a small business is a lot of work. Selling the business requires even more work because the business must continue to run while also preparing it to be sold. Small business owners can, luckily, hire accountants, attorneys and brokers for assistance. Profiting while preparing to sell can be difficult.

Consider the following when putting your small business on the market:

Your reason for selling

If you are considering selling your business to retire, because it has become too much work, or because of an illness or death that prevents key employees from working, it is likely that you will turn a profit.

How to Sell your Small Business

If you are selling because your business is no longer generating profit, it is less likely that you will gain much profit from selling. To make your business more attractive to potential buyers, try increasing your consumer base, gaining a more consistent income and increasing profits.

The timing of your sale

It is suggested to begin preparing one or two years before you plan on selling. Within this time, you can improve and perfect financial records, customer base and business structure. With everything prepared early, it is more likely that the sale will go smoothly and you can avoid last minute problems.

Current value of your business

A business appraiser can give you a valuation, which will include a detailed explanation of what the business is worth. Along with helping you to determine how much to sell your business for, the paperwork will also bring credibility to your price.

Using a broker

If you choose to sell your business on your own, you will save money by avoiding a broker’s commission fee, but a broker is a good decision to free up some of your time to keep the business running until it sells.

Gather documents

First, gather all of your financial statements and tax return information from the last few years to review with an accountant. Also collect a contact list for all sale and supply transactions and create copies to hand out to qualified buyers.

Once you are fully prepared to sell, you must find a buyer for your small business. Business sales can take anywhere from six months up to two years because it is important to find the right buyer. After narrowing down potential buyers to only a few, stay in contact with them all so that you have back-ups in case one falls through. Be willing to compromise on a deal, but do not give in completely. Stay firm if you have a certain price that you do not want to fall below. Most importantly, keep all agreements in writing.

After confirming a sale, all you have to do is release the business to your buyer and determine how to handle the profits. Take your time before determining how to spend it and remember that you will no longer have an income from the business. It is also important to learn about tax consequences.

If you are ready to sell your business, contact a small business attorney for help. Attorneys at the Gierach Law Firm in Naperville, Ill. can help you prepare to sell your business today.